“We simply assume that the way we see things is the way they really are or the way they should be. And our attitudes and behaviors grow out of these assumptions.” - Stephen Covey
Secret #1 – This is by far the single most important of the 8 secrets. It is the foundational key to all success
TAKE ACTION!
If you can’t take the action necessary to achieve financial independence and success, to improve your life, you will no doubt wind up right alongside the 95 percent of the population that is dependent on debt and are ultimately financial failures.
It’s that simple. You can have the very best teachers, the very best education and training, read the best books and listen to the best tapes but without taking action, it’s all wasted. I can’t emphasize this point too strongly or enough. You must find it in yourself to resolve to act; otherwise your thinking will amount to nothing.
Secret #2 – The level of success you achieve in your life is directly proportional to your willingness to accept full responsibility for your life. No matter where you are now, you can only achieve greater things if you take blame and hold yourself accountable for your past. Accept your past and grasp hold of your future.
Secret #3 – Failing to execute a plan for financial independence is the same as planning to fail. This seems fairly self evident. People just float around through their financial life hoping it will all somehow just work out. This is not only wrong but it reeks of insanity
Secret #4 – A home based business where you can invest work and time instead of money. You can make more money with a business of your own than a job would pay you and the tax benefits are worth the effort. It would be a good practice to start slow and small and work it steadily. Eventually, the income will exceed your job and you will need to make a decision as to whether you want to quit your job and take your business full time.
Secret #5 – Residual vs. Linear Income Most people work at a job that pays them a linear income, which means that for every hour they work they get paid an hour’s wage. Or they sell a widget and get paid a commission on that one widget. Residual income, on the other hand, is cumulative and continuous. Let’s say that you sell a widget, instead of getting paid a onetime commission, you get an ongoing commission for that sale month after month. Sell two widgets, get two times the residual.
Secret #6 – Multiplex Income This is the income that you receive when you run your own business and receive your income from the work and efforts of others.
Secret #7 – Positive Mental Attitude I used to think that keeping a positive mental attitude was the key ingredient to success and achievement, that if I maintained a PMA, success was sure to follow. I knew people that cranked up the positive attitude so much they glowed but were complete financial failures. While a PMA is extremely important, the ACTION needed in secret #1 is the true key. Couple PMA AND ACTION together and you have a solid foundation for success.
Secret #8 – Compound Interest Compound interest refers to the fact that whenever interest is calculated, it is based not only on the original principal, but also on any unpaid interest that has been added to the principal. The more frequently interest is compounded, the faster the balance grows.
A good lesson was learned on the golf course when two friends decided to “make it fun” by placing a wager on each hole. The bet was for a dime and on each hole the bet would double. Let’s do the math. The first hole is ten cents. The second hole is twenty and the third is forty cents. Not bad, just a friendly wager, right?
By the time they reached the ninth hole the bet was for $25.60. OK. Still not so bad for golf buddies. The tenth hole was $51.20, the eleventh hole was $102.40 and the twelfth hole was for $204.80! Now, if we were golfing this game, we would be getting a bit nervous. Hole 13 - $409.60. Hole 14 - $819.20. The bet continues to rise. By the 18th hole the bet will be a whopping $13,107.20!
THAT is the power of compound interest.
Dave Capra "The Debtonator" is author of "Your Guide To Perfect Credit", a radio show host, columnist and certified debt consultant. For information contact The Debtonator at 312.674.4861 or email thedebtonator@yourguidetoperfectcredit.com
http://www.yourguidetoperfectcredit.com http://www.franklindebtrelief.com
Article Source: http://EzineArticles.com/?expert=Dave_Capra
***
I think this is a classic article. Taking action, accepting responsiblity, planning, and home based businesses are all key to financial independence.
Friday, November 21, 2008
Tuesday, November 11, 2008
This Screwed up Economy Needs Entrepreneurs!!
The latest issue of Forbes (the one with the Forbes 400 richest Americans) has an article on Joseph Schumpeter, who they consider to be the greatest economist of the 20th century (I never heard of him before today...lol). The article made some pretty interesting statements on the importance of entrepreneurs for a successful economy.
Here's a few of the quotes:"Schumpeter recognized at a young age that the critical factor in economic progress was the entrepreneur, the innovator. To him it was the risk taker who brought about new products and services and more efficient ways of making and doing things.""Schumpeter recognized that a dynamic economy creates wide inequality. A successful entrepreneur, his investors and even some of his employees will get rich."
"Schumpeter was a genius at dissecting the ideologies and prejudices of other economists. Karl Marx, for example, also observed the dynamic nature of entrepreneurial capitalism. But he mistakenly concluded that this kind of change would inevitably, inexorably impoverish the workers. Instead -- as Schumpeter laid out time and time again -- an entrepreneurial economy means more people earning more and enjoying a higher standard of living. Adam Smith celebrated the importance of free trade, low taxes, property rights, the enforcement of contracts in enabling people to get richer. But he had very little appreciation of the crucial role individual entrepreneurs and innovators play in the process."
So to all the entrepreneurs and innovators out there, keep doing your thing. This screwed up economy needs us!!
from KDS at www.foryounginvestors.com
www.financialindependenceuniversity.com
Here's a few of the quotes:"Schumpeter recognized at a young age that the critical factor in economic progress was the entrepreneur, the innovator. To him it was the risk taker who brought about new products and services and more efficient ways of making and doing things.""Schumpeter recognized that a dynamic economy creates wide inequality. A successful entrepreneur, his investors and even some of his employees will get rich."
"Schumpeter was a genius at dissecting the ideologies and prejudices of other economists. Karl Marx, for example, also observed the dynamic nature of entrepreneurial capitalism. But he mistakenly concluded that this kind of change would inevitably, inexorably impoverish the workers. Instead -- as Schumpeter laid out time and time again -- an entrepreneurial economy means more people earning more and enjoying a higher standard of living. Adam Smith celebrated the importance of free trade, low taxes, property rights, the enforcement of contracts in enabling people to get richer. But he had very little appreciation of the crucial role individual entrepreneurs and innovators play in the process."
So to all the entrepreneurs and innovators out there, keep doing your thing. This screwed up economy needs us!!
from KDS at www.foryounginvestors.com
www.financialindependenceuniversity.com
Buy a Toll Bridge
BYLANES - Buffet's Toll Bridge
Imagine a river with a commercial district on one side and residential on the other. Now, imagine a bridge spanning the river, joining the two districts. And imagine that you own the bridge, and can charge a small fee for using the bridge. A few thousand cars pass over the bridge every day, and you charge each car a little something for using the bridge. I bet you have already started counting the money. Warren Buffet keeps this perspective in mind while choosing a stock.
Some basic advantages of such a `toll bridge` should be understood. One is that the cash register keeps ticking without a stop. The other advantage is that there are no sundry debtors. Further, the maintenance and expenditure is low and the profits can grow at a predictable rate, and that too for a number of years. If you (that is. the owner) do not become irrationally greedy and maintain the fees for crossing at a reasonable level, the customers will continue to use your bridge, and you will make money for a number of years to come.
Many businesses reach the status of a toll bridge because of the strong relationships their products build with the customers. The first sign of such a company is apparent when the customers demand the product by its brand name and don`t even know the name of the company that produces it. The second sign is that it has little, or no competition, and the third sign is that it is essential either as a necessity, or for its universal appeal, and, therefore, every store has to carry it.
Let us consider some examples in the Indian context. `Cadbury`s` chocolate, `Cherry Blossom` shoe polish (how many know the name of the company? (Viz. Reckitt & Coleman), `Dettol` disinfectant, `Aspro` and `Anacyn`--the headache cures--and `Amul` butter easily come to mind. In pharmaceuticals, Glaxo is one such name, which has many products in demand. Can any store afford not to have these products on their shelves? If the store does not have it, the customer just walks over to the next store and gets it.
Companies making such products are in a unique position. They have established the manufacturing process, people have accepted the quality and specifications, they do not have to invest large sums in the plant and machinery every year, and their supply chains and distribution network are well established. The net result is steadily growing profits. These companies have some more advantages. They do not need exceptional management, just an honest management capable of grabbing a good thing when they see it and not to make a mess of it. These companies do not require too much of research and development (R&D), as they invented the formula many years ago and their customers don`t want any change. Would you like Dettol to smell differently? A good friend of mine even used it as an after-shave for many years. The management may add a gift with the purchase of a bottle, or add a new flavor to the product range to grab a little extra of the market share, but a wise management will leave the main product untouched. In Dettol`s case, even the shape of the bottle is important.
Such structurally sound and `in-demand` toll bridges are great businesses to own. They give rise to plenty of free cash, which can be invested in building or buying another such toll bridge. These businesses survive through economic downturns, and continue to give the same returns. This feature makes it easier to predict their profitability. Value investors love this.
The return for the investor is on the one side the earnings per share (EPS) (or dividend) and on the other increase in the share price. If the annual EPS/dividend is predictable, and if the share is purchased at a low enough price, the investor is happy to get such a return year after year. Many times, we see such companies showing an increasing EPS trend. This is still better for the investor, because this increases the price of the share faster.
Much has been said and written about the intrinsic value of the business and how it is to be arrived at, but with insufficient justice to the discipline involved. Value investors eye the company first, but their decision to buy is a function of the price. Everything else about the company may be perfect and the value investor may be itching to own a part of it, but a disciplined investor will wait for the right price. Once purchased, the stock is not sold for a long time. The argument is simple. Why give away something `good` till something `better` comes along? Remember that a good toll bridge has a minimum life of 25 years. If the EPS is in the region of 20% and above on the price you paid, calculate the compounded value at the end of those 25 years and see for yourself. Yet there is a sad side. Like everything else in this world, bridges also deteriorate. Weather and time take a heavy toll of steel, and the bridge becomes unsafe. Those car owners who drove to work over that bridge for a number of years realise that the bridge is no longer safe and avoid using it. Some competitor senses the unease and builds a new bridge, and the owner of the original bridge dies an unsung death.
We know what happened to some automobile companies from the pre- liberalisation days. From the mid-50s to the mid-80s, Premier Padmini and Hindustan Motor`s Ambassador were the two cars ruling the market. For years, they continued to thrive without making any major changes in the models, and Indians had no choice but to buy those cars. Whatever was produced was sold, and that too against cash. Sub-standard goods were produced for years and dumped on the helpless customers. With little R&D and no improvement in the basic car, these plants were just waiting to receive a deathblow, and `Maruti` did just that. Customers had found another safer, newer, and cheaper bridge.
Sometimes, some management decisions cause problems. Excess cash poses a problem. The management does not know what to do with it, and then instead of buying another toll bridge, or improving the existing one, it buys a pyramid, which is just a tourist attraction and a place for the dead. The pyramid bleeds the parent company, and finally both perish. Acquisitions and mergers are good, but only of the same kind. In the recent past, we have seen the merger of Times Bank with HDFC Bank. Synergy in operation was evident, and the balance sheet proved it. The market also appreciated it, and the shareholders have reaped the benefit.
It is easy to say that one should invest in such `consumer monopolies`, as Warren Buffett calls them, but it is another thing to actually buy these shares. No one has monopoly over such a wisdom, and generally we find these shares selling at a high P/E multiple. Yet, occasionally, these shares sell at low prices. John Neff`s advice is worth following while waiting for a good price. He advices the investors to regularly scan the `New Lows` list in the financial newspapers. If you have earmarked a share, then this list alerts you when it starts coming down. Consider this example, In March 2000, Glaxo hit a new low of Rs 422. In August, it is trading at 480/490. Reckitt & Coleman hit a new low of Rs 192 in March. Now it is trading around 210/220. If someone had earmarked the share, then surely it was a good time to buy.
Sometimes, a `consumer monopoly` company remains unnoticed for a long time. These are the companies engaged in manufacturing some product, without which the big guns cannot do. An example could be that of a company manufacturing some critical chemical required for steel making. This company may also own the patent for the product and, thus, the monopoly remains assured for a long time. Such companies spend very little on advertising and, hence, are not widely known. Some event of social or political nature makes it conspicuous, and suddenly the great value of the share gets unlocked, and the price starts climbing. Mario Gabelli, a well-known investor from the US calls the event a `catalyst`. Noticing such a company in advance and then waiting patiently for a long enough time is what is needed. The rewards are great.
The best way to notice consumer monopolies is to visit various stores. If you find the same product on all the stores you visited, chances are that it is a consumer monopoly. Watch for the advertising campaigns. If there is a blitz, rest assured that the company is not confident about the demand. If the advertising is subdued and regular, just to tickle your memory cells, there is a good chance that the monopoly is operating. Some companies don`t advertise at all; for example, Amrutanjan, the headache balm.
Many years ago in Pune, a man started stamping his name on all goods that entered the city. The stamp was inconspicuous, yet readily visible. He did not charge a farthing for stamping the goods. Traders let him stamp their goods thinking of him as some harmless eccentric person, and soon goods which did not have his stamp were overlooked by customers in the city. So the traders started coming to him for getting their goods stamped, and then he started charging a small fee. In due course, he became a rich man. He had created his own `Toll Bridge`.
http://www.marketsidea.com/article/article_bylanes.htm
www.financialindependenceuniversity.com
Imagine a river with a commercial district on one side and residential on the other. Now, imagine a bridge spanning the river, joining the two districts. And imagine that you own the bridge, and can charge a small fee for using the bridge. A few thousand cars pass over the bridge every day, and you charge each car a little something for using the bridge. I bet you have already started counting the money. Warren Buffet keeps this perspective in mind while choosing a stock.
Some basic advantages of such a `toll bridge` should be understood. One is that the cash register keeps ticking without a stop. The other advantage is that there are no sundry debtors. Further, the maintenance and expenditure is low and the profits can grow at a predictable rate, and that too for a number of years. If you (that is. the owner) do not become irrationally greedy and maintain the fees for crossing at a reasonable level, the customers will continue to use your bridge, and you will make money for a number of years to come.
Many businesses reach the status of a toll bridge because of the strong relationships their products build with the customers. The first sign of such a company is apparent when the customers demand the product by its brand name and don`t even know the name of the company that produces it. The second sign is that it has little, or no competition, and the third sign is that it is essential either as a necessity, or for its universal appeal, and, therefore, every store has to carry it.
Let us consider some examples in the Indian context. `Cadbury`s` chocolate, `Cherry Blossom` shoe polish (how many know the name of the company? (Viz. Reckitt & Coleman), `Dettol` disinfectant, `Aspro` and `Anacyn`--the headache cures--and `Amul` butter easily come to mind. In pharmaceuticals, Glaxo is one such name, which has many products in demand. Can any store afford not to have these products on their shelves? If the store does not have it, the customer just walks over to the next store and gets it.
Companies making such products are in a unique position. They have established the manufacturing process, people have accepted the quality and specifications, they do not have to invest large sums in the plant and machinery every year, and their supply chains and distribution network are well established. The net result is steadily growing profits. These companies have some more advantages. They do not need exceptional management, just an honest management capable of grabbing a good thing when they see it and not to make a mess of it. These companies do not require too much of research and development (R&D), as they invented the formula many years ago and their customers don`t want any change. Would you like Dettol to smell differently? A good friend of mine even used it as an after-shave for many years. The management may add a gift with the purchase of a bottle, or add a new flavor to the product range to grab a little extra of the market share, but a wise management will leave the main product untouched. In Dettol`s case, even the shape of the bottle is important.
Such structurally sound and `in-demand` toll bridges are great businesses to own. They give rise to plenty of free cash, which can be invested in building or buying another such toll bridge. These businesses survive through economic downturns, and continue to give the same returns. This feature makes it easier to predict their profitability. Value investors love this.
The return for the investor is on the one side the earnings per share (EPS) (or dividend) and on the other increase in the share price. If the annual EPS/dividend is predictable, and if the share is purchased at a low enough price, the investor is happy to get such a return year after year. Many times, we see such companies showing an increasing EPS trend. This is still better for the investor, because this increases the price of the share faster.
Much has been said and written about the intrinsic value of the business and how it is to be arrived at, but with insufficient justice to the discipline involved. Value investors eye the company first, but their decision to buy is a function of the price. Everything else about the company may be perfect and the value investor may be itching to own a part of it, but a disciplined investor will wait for the right price. Once purchased, the stock is not sold for a long time. The argument is simple. Why give away something `good` till something `better` comes along? Remember that a good toll bridge has a minimum life of 25 years. If the EPS is in the region of 20% and above on the price you paid, calculate the compounded value at the end of those 25 years and see for yourself. Yet there is a sad side. Like everything else in this world, bridges also deteriorate. Weather and time take a heavy toll of steel, and the bridge becomes unsafe. Those car owners who drove to work over that bridge for a number of years realise that the bridge is no longer safe and avoid using it. Some competitor senses the unease and builds a new bridge, and the owner of the original bridge dies an unsung death.
We know what happened to some automobile companies from the pre- liberalisation days. From the mid-50s to the mid-80s, Premier Padmini and Hindustan Motor`s Ambassador were the two cars ruling the market. For years, they continued to thrive without making any major changes in the models, and Indians had no choice but to buy those cars. Whatever was produced was sold, and that too against cash. Sub-standard goods were produced for years and dumped on the helpless customers. With little R&D and no improvement in the basic car, these plants were just waiting to receive a deathblow, and `Maruti` did just that. Customers had found another safer, newer, and cheaper bridge.
Sometimes, some management decisions cause problems. Excess cash poses a problem. The management does not know what to do with it, and then instead of buying another toll bridge, or improving the existing one, it buys a pyramid, which is just a tourist attraction and a place for the dead. The pyramid bleeds the parent company, and finally both perish. Acquisitions and mergers are good, but only of the same kind. In the recent past, we have seen the merger of Times Bank with HDFC Bank. Synergy in operation was evident, and the balance sheet proved it. The market also appreciated it, and the shareholders have reaped the benefit.
It is easy to say that one should invest in such `consumer monopolies`, as Warren Buffett calls them, but it is another thing to actually buy these shares. No one has monopoly over such a wisdom, and generally we find these shares selling at a high P/E multiple. Yet, occasionally, these shares sell at low prices. John Neff`s advice is worth following while waiting for a good price. He advices the investors to regularly scan the `New Lows` list in the financial newspapers. If you have earmarked a share, then this list alerts you when it starts coming down. Consider this example, In March 2000, Glaxo hit a new low of Rs 422. In August, it is trading at 480/490. Reckitt & Coleman hit a new low of Rs 192 in March. Now it is trading around 210/220. If someone had earmarked the share, then surely it was a good time to buy.
Sometimes, a `consumer monopoly` company remains unnoticed for a long time. These are the companies engaged in manufacturing some product, without which the big guns cannot do. An example could be that of a company manufacturing some critical chemical required for steel making. This company may also own the patent for the product and, thus, the monopoly remains assured for a long time. Such companies spend very little on advertising and, hence, are not widely known. Some event of social or political nature makes it conspicuous, and suddenly the great value of the share gets unlocked, and the price starts climbing. Mario Gabelli, a well-known investor from the US calls the event a `catalyst`. Noticing such a company in advance and then waiting patiently for a long enough time is what is needed. The rewards are great.
The best way to notice consumer monopolies is to visit various stores. If you find the same product on all the stores you visited, chances are that it is a consumer monopoly. Watch for the advertising campaigns. If there is a blitz, rest assured that the company is not confident about the demand. If the advertising is subdued and regular, just to tickle your memory cells, there is a good chance that the monopoly is operating. Some companies don`t advertise at all; for example, Amrutanjan, the headache balm.
Many years ago in Pune, a man started stamping his name on all goods that entered the city. The stamp was inconspicuous, yet readily visible. He did not charge a farthing for stamping the goods. Traders let him stamp their goods thinking of him as some harmless eccentric person, and soon goods which did not have his stamp were overlooked by customers in the city. So the traders started coming to him for getting their goods stamped, and then he started charging a small fee. In due course, he became a rich man. He had created his own `Toll Bridge`.
http://www.marketsidea.com/article/article_bylanes.htm
www.financialindependenceuniversity.com
Warren Buffett on Investing
Warren Buffett, probably the greatest investor of his generation, rarely communicates his investment ideas in writing to the general public. And why should he? If someone has that extra edge when it comes to making money from the stock markets, he would rather use it for himself rather than go around sharing it. But once a year, he makes an exception to the rule and does give out his way of thinking through the annual letter he writes to the shareholders of Berkshire Hathaway. Other than this he has given many speeches over the years, which have given the general public some idea of the way he thinks. Here are a few of these gems which he has shared with his shareholders over the years through his letters and speeches.
1. Buy the business and not the stock
The speech titled, 'The Superinvestors of Graham and Doddsville,' delivered to the students of Columbia Business School in 1984, remains the most famous speech that Buffett ever made. This speech was delivered at a seminar held to celebrate the 50 years of the publication of Benjamin Graham and David Dodd's book Security Analysis. Benjamin Graham was Warren Buffett's Guru at Columbia School and all the years that Graham taught there Buffett was his only student to have got an A+ grade. And Buffett, as we all know, has surely lived up to that grade. This speech elucidated his firm belief in the principle of value investing. Value investors, he said, "search for discrepancies between the value of a business and the price of small pieces of that business in the market." Hence, the only thing they are bothered about is "how much is the business worth?" As Buffet said in the speech, "He's not looking at quarterly earnings projections, he's not looking at next year's earnings, he's not thinking about what day of the week it is, he doesn't care what investment research from any place says, he's not interested in price momentum, volume or anything. He's simply asking: What is the business worth?" And hence, as Buffett points out in the speech about value investors. "While they differ greatly in style, these investors are, mentally, always buying the business, not buying the stock." As we all know, the question 'how much is a business worth?' is not easy to answer and depends on how closely the investor follows the business of the company he is investing in and the understanding he has of that particular line of business. Buffett himself follows this and does not invest in businesses he does not understand. Information technology is one sector he has consciously stayed away from even at the height of the technology boom.
2. Buy when the stock prices are low
One of the peculiar things about stock markets is the fact that investors like to buy when the markets are doing well and the stock prices are on their way up. This is not the best way to invest given the fact that in everyday life we like to buy more of something only when the prices are low. Buffett explains this point in his letter to the shareholders for the year 1997. "A short quiz: If you plan to eat hamburgers throughout your life and are not a cattle producer, should you wish for higher or lower prices for beef? Likewise, if you are going to buy a car from time to time but are not an auto manufacturer, should you prefer higher or lower car prices?" "These questions," he goes on, "of course, answer themselves. But now for the final exam: If you expect to be a net saver during the next five years, should you hope for a higher or lower stock market during that period? Many investors get this one wrong. Even though they are going to be net buyers of stocks for many years to come, they are elated when stock prices rise and depressed when they fall. In effect, they rejoice because prices have risen for the 'hamburgers' they will soon be buying. This reaction makes no sense. Only those who will be sellers of equities in the near future should be happy at seeing stocks rise. Prospective purchasers should much prefer sinking prices."
3. For investors as a whole, returns decrease as motion increases
Getting into stock because everyone around you is and hoping to make money from it money successfully is not everyone's cup of tea. As more and more investors get into the same stock, and price rises, the chances of making money from the stock go down. In his 2005 letter Buffett wrote, "Long ago, Sir Isaac Newton gave us three laws of motion, which were the work of genius. But Sir Isaac's talents didn't extend to investing: he lost a bundle in the South Sea Bubble, explaining later, 'I can calculate the movement of the stars, but not the madness of men.' If he had not been traumatized by this loss, Sir Isaac might well have gone on to discover the Fourth Law of Motion: 'For investors as a whole, returns decrease as motion increases.'"
4. There is a thin line separating investment and speculation
Buffett explains this beautifully in his letter to the shareholders in the year 2000. "The line separating investment and speculation, which is never bright and clear, becomes blurred still further when most market participants have recently enjoyed triumphs. Nothing sedates rationality like large doses of effortless money." "After a heady experience of that kind, normally sensible people drift into behavior akin to that of Cinderella at the ball. They know that overstaying the festivities -- that is, continuing to speculate in companies that have gigantic valuations relative to the cash they are likely to generate in the future -- will eventually bring on pumpkins and mice. But they nevertheless hate to miss a single minute of what is one helluva party. Therefore, the giddy participants all plan to leave just seconds before midnight. There's a problem, though: They are dancing in a room in which the clocks have no hands."
http://www.marketsidea.com/article/Index_articles.htm
www.financialindependenceuniversity.com
1. Buy the business and not the stock
The speech titled, 'The Superinvestors of Graham and Doddsville,' delivered to the students of Columbia Business School in 1984, remains the most famous speech that Buffett ever made. This speech was delivered at a seminar held to celebrate the 50 years of the publication of Benjamin Graham and David Dodd's book Security Analysis. Benjamin Graham was Warren Buffett's Guru at Columbia School and all the years that Graham taught there Buffett was his only student to have got an A+ grade. And Buffett, as we all know, has surely lived up to that grade. This speech elucidated his firm belief in the principle of value investing. Value investors, he said, "search for discrepancies between the value of a business and the price of small pieces of that business in the market." Hence, the only thing they are bothered about is "how much is the business worth?" As Buffet said in the speech, "He's not looking at quarterly earnings projections, he's not looking at next year's earnings, he's not thinking about what day of the week it is, he doesn't care what investment research from any place says, he's not interested in price momentum, volume or anything. He's simply asking: What is the business worth?" And hence, as Buffett points out in the speech about value investors. "While they differ greatly in style, these investors are, mentally, always buying the business, not buying the stock." As we all know, the question 'how much is a business worth?' is not easy to answer and depends on how closely the investor follows the business of the company he is investing in and the understanding he has of that particular line of business. Buffett himself follows this and does not invest in businesses he does not understand. Information technology is one sector he has consciously stayed away from even at the height of the technology boom.
2. Buy when the stock prices are low
One of the peculiar things about stock markets is the fact that investors like to buy when the markets are doing well and the stock prices are on their way up. This is not the best way to invest given the fact that in everyday life we like to buy more of something only when the prices are low. Buffett explains this point in his letter to the shareholders for the year 1997. "A short quiz: If you plan to eat hamburgers throughout your life and are not a cattle producer, should you wish for higher or lower prices for beef? Likewise, if you are going to buy a car from time to time but are not an auto manufacturer, should you prefer higher or lower car prices?" "These questions," he goes on, "of course, answer themselves. But now for the final exam: If you expect to be a net saver during the next five years, should you hope for a higher or lower stock market during that period? Many investors get this one wrong. Even though they are going to be net buyers of stocks for many years to come, they are elated when stock prices rise and depressed when they fall. In effect, they rejoice because prices have risen for the 'hamburgers' they will soon be buying. This reaction makes no sense. Only those who will be sellers of equities in the near future should be happy at seeing stocks rise. Prospective purchasers should much prefer sinking prices."
3. For investors as a whole, returns decrease as motion increases
Getting into stock because everyone around you is and hoping to make money from it money successfully is not everyone's cup of tea. As more and more investors get into the same stock, and price rises, the chances of making money from the stock go down. In his 2005 letter Buffett wrote, "Long ago, Sir Isaac Newton gave us three laws of motion, which were the work of genius. But Sir Isaac's talents didn't extend to investing: he lost a bundle in the South Sea Bubble, explaining later, 'I can calculate the movement of the stars, but not the madness of men.' If he had not been traumatized by this loss, Sir Isaac might well have gone on to discover the Fourth Law of Motion: 'For investors as a whole, returns decrease as motion increases.'"
4. There is a thin line separating investment and speculation
Buffett explains this beautifully in his letter to the shareholders in the year 2000. "The line separating investment and speculation, which is never bright and clear, becomes blurred still further when most market participants have recently enjoyed triumphs. Nothing sedates rationality like large doses of effortless money." "After a heady experience of that kind, normally sensible people drift into behavior akin to that of Cinderella at the ball. They know that overstaying the festivities -- that is, continuing to speculate in companies that have gigantic valuations relative to the cash they are likely to generate in the future -- will eventually bring on pumpkins and mice. But they nevertheless hate to miss a single minute of what is one helluva party. Therefore, the giddy participants all plan to leave just seconds before midnight. There's a problem, though: They are dancing in a room in which the clocks have no hands."
http://www.marketsidea.com/article/Index_articles.htm
www.financialindependenceuniversity.com
Monday, November 10, 2008
My Secret to Unlimited Web Site Traffic
If you give me two minutes of your time, I can show you how to get all the traffic you could ever want by using just one little secret...
This one little secret has the power to spread your name across the Internet like wildfire. It will quickly bring you massive exposure and an endless line of raving fans just waiting for your next email, article, podcast, or video.
And you know what, I'm going to give you the secret for free... But don't let that devalue the information I'm about to share. This can be extremely powerful when put in the right hands.
So, let me whisper my surprising little secret into your ear...
Remarkable Content!
Yes.... Remarkable Content. Words that speak directly to your readers... Words that win the minds and hearts of your audience... Entertaining content that's juicier than all the latest celebrity blogs.
I need to crave your content more than I do my daily Starbucks.
Do you get it?
It's got to be that good.
So, how do you write Remarkable Content...
1. Emotional Engagement - Great content evokes some sort of emotional reaction, whether it be laughter, tears, or just the thought of "Wow, this is good stuff." If you can get some sort of emotional engagement, you've hit a winner and people are much more likely to pass it around.
2. Personality - Good content, regardless of whether it's an article, an email, or a Twitter post, needs to be stamped with your personality.
Just a dash of personality can make a huge difference in how your readers engage and respond to your content.
3. Changes Your Perspective. Truly great content will change the way you perceive a particular topic, idea, or thought process.
4. Deliver the Goods. People come online for information. It's your job to deliver the answers they've been looking for. All the better if you can deliver this information in a creative, entertaining way.
In order to write truly great content, you must know your audience as well as you know yourself. When you do that, you can write directly to their fears, frustrations, aspirations, and desires.
5. Passion. It's the secret ingredient to all great content. Your readers will instantly detect it and be drawn to your writing, your videos, your podcasts, and any other form of content you produce.
6. Connect. You have to remember that behind every piece of content is a person. It's easy to slave away on the computer, pounding out articles and forget that you're writing to real people.
So before you lay a single finger on the keyboard, grab some coffee, take a deep breath, and imagine that you're sitting across from a friend. You know all of their quirks, their frustrations, theirs hopes and their dreams.
Once you've painted a perfect picture of who you're writing to, you're now ready to fire up your favorite text editor and settle in for a nice long chat.
Once I started using this technique, my writing soon became more engaging, insightful, and passionate. And you can bet your readers will take notice.
7. Leave them wanting more. The best content online leaves your reader wanting more.
You've given them a refreshing glass of water in the middle of the desert and now they're eager to devour your next piece of content, open your next email, and spread your content to all their friends.
You'll be surprised how quickly you start to build up a group of raving fans when you put out truly great content. In fact, this is one of THE fastest ways to become successful online. By creating remarkable content you will quickly establish yourself as a trusted authority in your market.
Remember, those who stand out get the attention.
Break through the clutter.
Grab Front Page Rankings in 24 hours - My Free Google Domination Videos show you how...
Article Source: http://EzineArticles.com/?expert=Kim_Roach
**also see the traffic page at www.financialindependenceuniversity.com
This one little secret has the power to spread your name across the Internet like wildfire. It will quickly bring you massive exposure and an endless line of raving fans just waiting for your next email, article, podcast, or video.
And you know what, I'm going to give you the secret for free... But don't let that devalue the information I'm about to share. This can be extremely powerful when put in the right hands.
So, let me whisper my surprising little secret into your ear...
Remarkable Content!
Yes.... Remarkable Content. Words that speak directly to your readers... Words that win the minds and hearts of your audience... Entertaining content that's juicier than all the latest celebrity blogs.
I need to crave your content more than I do my daily Starbucks.
Do you get it?
It's got to be that good.
So, how do you write Remarkable Content...
1. Emotional Engagement - Great content evokes some sort of emotional reaction, whether it be laughter, tears, or just the thought of "Wow, this is good stuff." If you can get some sort of emotional engagement, you've hit a winner and people are much more likely to pass it around.
2. Personality - Good content, regardless of whether it's an article, an email, or a Twitter post, needs to be stamped with your personality.
Just a dash of personality can make a huge difference in how your readers engage and respond to your content.
3. Changes Your Perspective. Truly great content will change the way you perceive a particular topic, idea, or thought process.
4. Deliver the Goods. People come online for information. It's your job to deliver the answers they've been looking for. All the better if you can deliver this information in a creative, entertaining way.
In order to write truly great content, you must know your audience as well as you know yourself. When you do that, you can write directly to their fears, frustrations, aspirations, and desires.
5. Passion. It's the secret ingredient to all great content. Your readers will instantly detect it and be drawn to your writing, your videos, your podcasts, and any other form of content you produce.
6. Connect. You have to remember that behind every piece of content is a person. It's easy to slave away on the computer, pounding out articles and forget that you're writing to real people.
So before you lay a single finger on the keyboard, grab some coffee, take a deep breath, and imagine that you're sitting across from a friend. You know all of their quirks, their frustrations, theirs hopes and their dreams.
Once you've painted a perfect picture of who you're writing to, you're now ready to fire up your favorite text editor and settle in for a nice long chat.
Once I started using this technique, my writing soon became more engaging, insightful, and passionate. And you can bet your readers will take notice.
7. Leave them wanting more. The best content online leaves your reader wanting more.
You've given them a refreshing glass of water in the middle of the desert and now they're eager to devour your next piece of content, open your next email, and spread your content to all their friends.
You'll be surprised how quickly you start to build up a group of raving fans when you put out truly great content. In fact, this is one of THE fastest ways to become successful online. By creating remarkable content you will quickly establish yourself as a trusted authority in your market.
Remember, those who stand out get the attention.
Break through the clutter.
Grab Front Page Rankings in 24 hours - My Free Google Domination Videos show you how...
Article Source: http://EzineArticles.com/?expert=Kim_Roach
**also see the traffic page at www.financialindependenceuniversity.com
Never Ever Quit
When things go wrong
As they sometimes will,
When the road you are trudging
Seems all uphill,
When the funds ar low
And the debts are high,
And you want to smile
But you have to sigh,
When life is pressing you down a bit
-Rest if you must, but don’t you quit,
Success is failure turned inside out,
It is the silver tint of the clouds of doubt,
And you never cant tell
How close you are,
It may be near when it seems afar.
So, stick to the fight
When you’re harvest hit
-It’s when thing go wrong
That you must not quit!
http://www.financialindependenceuniversity.com/
As they sometimes will,
When the road you are trudging
Seems all uphill,
When the funds ar low
And the debts are high,
And you want to smile
But you have to sigh,
When life is pressing you down a bit
-Rest if you must, but don’t you quit,
Success is failure turned inside out,
It is the silver tint of the clouds of doubt,
And you never cant tell
How close you are,
It may be near when it seems afar.
So, stick to the fight
When you’re harvest hit
-It’s when thing go wrong
That you must not quit!
http://www.financialindependenceuniversity.com/
Wednesday, November 5, 2008
Mastermind Effect
According to Napoleon Hill the "Master Mind" can be defined as "Coordination of knowledge and effort, in a spirit of harmony, between two or more people, for the attainment of a definite purpose". When I first began my seemingly endless search for the "right"answers to grow my business it seemed like there were obstacles onevery corner. I was plagued by indecision, procrastination, fear of taking risks, "bright shiny object syndrome", lack of money, lack of knowledge and so on. Being alone day in and day out allowed me to create all kinds of thoughts in my head that served no purpose. Sure, I was working like a dog, marketing like crazy but I didn't have anyinteraction with people who were going through the same types of things I was. Until I found a mastermind group.The idea of masterminding has been around for a hundred years andit's long been touted as one of the single best ways to see rapid success in your life. Why? Because the collective knowledge, expertise, ideas and encouragement of the many is far more powerful than the mind of one.
4 Benefits of Mastermind Groups
Specialized Knowledge
No one person knows it all, which is one of the most common reasonspeople fall short of their goal, or choose not to take chances. People believe they don't have the knowledge or required education toget where they want to be. The fact is, no successful individual hasbecome successful because he/she knew everything. Napoleon Hill talks about this at great length in Think and Grow Rich in the chapter on Specialized Knowledge. The most successful people are not the oneswho know how to do everything but the ones who know how to get peopleto do for them what they don't know. So, in a mastermind people are able to leverage the knowledge and strengths of everyone around them to move forward more quickly toward their own goals.
Definiteness of Purpose
Definiteness of purpose is a key to your success. If you do not knowwith absolute certainty what you want, you will never reach the levelof success that is possible. Mastermind groups offer knowledge, information, and direction. Members help you stay on track, call youout when you are not doing what you say you are going to do andgenerally serve as the more rational voice inside you to keep youreye on the prize. Do not underestimate the power of this.
Unlimited Experience
An individual who is trying to develop a strategy to grow her business for the first time has a high probability of failure becauseshe has finite experience. She has only what she currently knows toguide her. However, the mastermind group has infinite experience. It has years of combined experience, knowledge and insight you can drawfrom to accelerate your learning curve.
Group Energy
Many entrepreneurs struggle because they don't have consistentinteraction with their peers on a daily basis. They may work withclients and attend events a few times a month but working inisolation can be dangerous. Having a mastermind group that you arepart of on a weekly basis can keep you connected, help you to seethat your struggles are not unique, and that you can have outrageoussuccess even if your stumble once in a while. Mastermind groups keepus honest, keep us on track and encourage us to do more and be more.
Finding a Good Mastermind Group
I have been in some mastermind groups that were fantastic and othersthat were completely useless. Here are a few things I have learnedwhen it comes to choosing the right mastermind situation or leavingone that's not working.
1. The energy of the group has to be good. If the chemistry is wrong,if someone is always trying to dominate or you dread getting on thecall, you're in the wrong place. It can be a challenge to get a grouptogether that really clicks but it's certainly possible so don'tsettle.
2. The mastermind has to define its own rules. There have to be rulesthat everyone in the group agrees to such as how it will bestructured, rules for speaking, confidentiality, and attendance. A mastermind group where people rarely show up, don't engage, comeunprepared, and take the confidentiality part too loosely are toxic.Look for a group that is organized, requires attendance and has asolid structure. It will make it so much more successful for all involved.
3. The ultimate goal has to be the same for all. Each person willhave a specific goal of joining the mastermind but the collectivegoal of the group should be to help each individual member achievetheir goals and reach the level of success they desire. When thatbigger picture is kept in mind, everyone wins.
How do you find one to join? There are so many opportunities these days to join mastermind groups.They range in price from free (you could put your own together) tohundreds of thousands of dollars for high end groups. I recommendjust doing some research. In fact, you may find that your mentor hasa continuity program with a mastermind component to it. The key is to just find the right spot for you and don't give up until you do. Like mentoring, mastermind groups can have a profound impact on yoursuccess and even more importantly, how quickly you achieve it.
Success coach Melani Ward helps women entrepreneurs create thebusiness of their dreams so they can create more money, time and freedom in their lives. If you're ready to get more clients, havemore fun and make a whole lot more money in your small business, getyour FREE report "Proven Steps for Creating the Business Lifestyle ofYour Dreams" NOW at http://www.HotButtonCopy.comArticle Source: http://EzineArticles.com/?expert=Melani_Ward
4 Benefits of Mastermind Groups
Specialized Knowledge
No one person knows it all, which is one of the most common reasonspeople fall short of their goal, or choose not to take chances. People believe they don't have the knowledge or required education toget where they want to be. The fact is, no successful individual hasbecome successful because he/she knew everything. Napoleon Hill talks about this at great length in Think and Grow Rich in the chapter on Specialized Knowledge. The most successful people are not the oneswho know how to do everything but the ones who know how to get peopleto do for them what they don't know. So, in a mastermind people are able to leverage the knowledge and strengths of everyone around them to move forward more quickly toward their own goals.
Definiteness of Purpose
Definiteness of purpose is a key to your success. If you do not knowwith absolute certainty what you want, you will never reach the levelof success that is possible. Mastermind groups offer knowledge, information, and direction. Members help you stay on track, call youout when you are not doing what you say you are going to do andgenerally serve as the more rational voice inside you to keep youreye on the prize. Do not underestimate the power of this.
Unlimited Experience
An individual who is trying to develop a strategy to grow her business for the first time has a high probability of failure becauseshe has finite experience. She has only what she currently knows toguide her. However, the mastermind group has infinite experience. It has years of combined experience, knowledge and insight you can drawfrom to accelerate your learning curve.
Group Energy
Many entrepreneurs struggle because they don't have consistentinteraction with their peers on a daily basis. They may work withclients and attend events a few times a month but working inisolation can be dangerous. Having a mastermind group that you arepart of on a weekly basis can keep you connected, help you to seethat your struggles are not unique, and that you can have outrageoussuccess even if your stumble once in a while. Mastermind groups keepus honest, keep us on track and encourage us to do more and be more.
Finding a Good Mastermind Group
I have been in some mastermind groups that were fantastic and othersthat were completely useless. Here are a few things I have learnedwhen it comes to choosing the right mastermind situation or leavingone that's not working.
1. The energy of the group has to be good. If the chemistry is wrong,if someone is always trying to dominate or you dread getting on thecall, you're in the wrong place. It can be a challenge to get a grouptogether that really clicks but it's certainly possible so don'tsettle.
2. The mastermind has to define its own rules. There have to be rulesthat everyone in the group agrees to such as how it will bestructured, rules for speaking, confidentiality, and attendance. A mastermind group where people rarely show up, don't engage, comeunprepared, and take the confidentiality part too loosely are toxic.Look for a group that is organized, requires attendance and has asolid structure. It will make it so much more successful for all involved.
3. The ultimate goal has to be the same for all. Each person willhave a specific goal of joining the mastermind but the collectivegoal of the group should be to help each individual member achievetheir goals and reach the level of success they desire. When thatbigger picture is kept in mind, everyone wins.
How do you find one to join? There are so many opportunities these days to join mastermind groups.They range in price from free (you could put your own together) tohundreds of thousands of dollars for high end groups. I recommendjust doing some research. In fact, you may find that your mentor hasa continuity program with a mastermind component to it. The key is to just find the right spot for you and don't give up until you do. Like mentoring, mastermind groups can have a profound impact on yoursuccess and even more importantly, how quickly you achieve it.
Success coach Melani Ward helps women entrepreneurs create thebusiness of their dreams so they can create more money, time and freedom in their lives. If you're ready to get more clients, havemore fun and make a whole lot more money in your small business, getyour FREE report "Proven Steps for Creating the Business Lifestyle ofYour Dreams" NOW at http://www.HotButtonCopy.comArticle Source: http://EzineArticles.com/?expert=Melani_Ward
Monday, November 3, 2008
Free Traffic Building eBook
I am writing a short, concise, no fluff eBook on traffic building.
I will give this traffic building eBook away for free!!
This traffic building eBook contains sections on: web 2.0, blogs, keywords, article marketing, PPC, etc.
Sign up for the newsletter at www.financialindependenceuniversity.com and you will receive your free copy.
I will give this traffic building eBook away for free!!
This traffic building eBook contains sections on: web 2.0, blogs, keywords, article marketing, PPC, etc.
Sign up for the newsletter at www.financialindependenceuniversity.com and you will receive your free copy.
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